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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

2012 CHICAGO – CANCUN COMBINATION

SERVICE PROCEEDING

)

)

)

)

Docket DOT-OST-2012-0001

COMMENTS OF

FRONTIER AIRLINES, INC.

Communications with respect to this document should be addressed to:

Daniel Shurz

Vice President, Planning and Strategy

FRONTIER AIRLINES, INC.

Frontier Center One

7001 Tower Road

Denver, CO 80249

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659

robert.cohn@hoganlovells.com

patrick.rizzi@hoganlovells.com

Counsel for

FRONTIER AIRLINES, INC.

March 26, 2012
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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

2012 CHICAGO – CANCUN COMBINATION

SERVICE PROCEEDING

)

)

)

)

Docket DOT-OST-2012-0001

March 26, 2012

COMMENTS OF

FRONTIER AIRLINES, INC.

Frontier Airlines, Inc. (“Frontier”) submits these brief comments on the

Department’s Order to Show Cause (Order 2012-3-10) tentatively awarding

primary exemption authority to AirTran Airways, Inc. (“AirTran”) to provide

scheduled foreign air transportation between Chicago and Cancun and backup

exemption authority to Frontier.

Frontier recognizes that Show Cause tentative decisions are almost never

reversed and for that reason Frontier does not formally object to the

Department’s determination. However, Frontier is disappointed by the

Department’s decision to make the primary award to AirTran rather than Frontier,

and to forego the unique opportunity presented by this proceeding to inject a

committed low-fare LCC to compete head-to-head against the three U.S. and

foreign legacy carriers’ (United, American and Aeromexico) high-fare services at

O’Hare, the primary international airport of choice for the City of Chicago.

Frontier agrees with the Department’s determination not to give any credit to the
Comments of Frontier Airlines, Inc.

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illusory network benefits that Southwest/AirTran claimed would be derived from

the future integration of AirTran’s and Southwest’s operations. And, Frontier

supports the Department’s award to Frontier of back-up authority if AirTran

abandons the market.

In this and other limited-authority proceedings, Southwest/AirTran has

adopted the mantle of the large legacy airlines, arguing that bigger is better.

Southwest/AirTran has indeed become a behemoth legacy airline with all of the

attributes of that group, including market dominance and ever increasing

average fares. In fact, Southwest proudly boasts that it is now the largest U.S.

airline in terms of passengers. But larger isn’t always better. As Frontier

demonstrated, Southwest’s average domestic yield is now 30% higher than

Frontier’s. Frontier’s Answer, Exhibit A-8. And, as Frontier has shown, Frontier

has lower fares than Southwest in 19 Denver markets where the two carriers

compete head-to-head. Given the relatively few remaining LCCs, the

Department should use the award of limited-authority rights to bolster the ability

of smaller LCCs to compete more effectively against the legacy carriers,

including Southwest, as a means to maximize low-fare consumer benefits.

For the reasons stated above, Frontier does not object to the Show Cause

Order. Frontier is eager to begin scheduled service on this route if and when its

back-up authority is activated.
Comments of Frontier Airlines, Inc.

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Respectfully submitted,

____________________________

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659

Counsel for

FRONTIER AIRLINES, INC.
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CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Comments of

Frontier Airlines, Inc. has been served this 26th day of March, 2012, upon each

of the following addressees:

bob.kneisley@wnco.com; paul.gretch@dot.gov; brian.hedberg@dot.gov;

esta.rosenberg@dot.gov; brett.kruger@dot.gov; urskr@state.gov;

rosemarie.sandolino@cityofchicago.org; info@airlineinfo.com

Jonathan Echmalian